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Delhaize losing out over Unilever battle -survey

BRUSSELS, Feb 16 (Reuters) - Belgian supermarket group Delhaize DELB.BR is losing customers to rivals in Belgium over its decision to stop stocking some Unilever ULVR.L products after price negotiations collapsed, a survey showed on Monday.

Some 31 percent of Delhaize customers had chosen to shop elsewhere to obtain Unilever products, according to agency Brandhome.

Of them, some 40 percent were choosing discount rival Colruyt COLB.BR and about 40 percent French group Carrefour's CARR.PA hypermarkets and smaller "GB" stores.

The survey of some 3,500 people in Belgium’s northern region of Flanders also found 19 percent of Delhaize customers were unhappy with the group’s decision not to stock some 300 Unilever products and were still considering what to do.

Of those remaining at Delhaize, some 47 percent had decided to switch from Unilever products to other well-known labels. Around half were buying Delhaize’s own brands.

“It shows that customers are dependent on brands and that they have carefully selected the ones they want,” said Erik Saelens, Brandhome’s director of strategy.

“I think that nobody wins and it’s not intelligent to start extreme price wars like this,” he added.

Unilever normally supplies Delhaize with 480 different products.

Bank Degroof analyst Ivan Lathouders said the impact on Delhaize would likely be limited, given that only 23 percent of sales were in Belgium in 2008 compared with 69 percent in the United States.

“We believe that, as it is in the interest of both parties, Delhaize and Unilever will reach an agreement soon,” he said. (Reporting by Philip Blenkinsop; Editing by David Holmes)

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